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It is good to read your farm roots. When I referred to listening to the
farmers for the trading opportunities. I did not mean what you replied
with. What I was referring to was the observation that there is an us
(farmers) and them (institutions - Cargill, IBP, etc.). Not what Darrell
thinks will be a good direction of the market. But the big picture of
how these two groups push against one another.
Harley
Steve Karnish wrote:
>
> Harley,
>
> The only thing I know about Yankton is that Lyle Alzado went to
> school there. I have traded grain since 1975 and I live in the
> "Palouse". My area is the largest yielding, per acre, wheat
> country in the world. Many neighbors are harvesting 105 to 120
> bushels an acre this year. At $2.50 a bushel, their bountiful
> harvest are still not allowing them to break even on their
> investments. Without discussing/arguing your "assumptions" on a
> point to point basis, I will only take issue with you on one of
> your statements:
>
> > " But if you want to take advantage of the
> > trading opportunities then you need to listen to
> > the farmers who are trying to hedge their crops or
> > livestock."
>
> I've trading for hundreds of producers and well, they're really
> good at producing a crop; but, they are the worst marketers I've
> ever encountered. Listening to market and trading advice from a
> family farmer, (I married into the fifth generation to work the
> land I live on), is a quick trip to the poor house.
>
> The ability to discern market direction is a tough job that
> involves endless hours of analytical work (pencil and paper
> pushing). As they say around here: "To even get a farmer to do
> paperwork is like nailing butter to the wall." I use my
> customers' advice as contrarian opinions. If my producers all
> what to be long, there is no doubt, in my mind, that the market
> will continue to slide.
>
> I've talked to about 200 wheat farmers in the last year and have
> asked each group I've spoken to if anyone, in the gathering,
> took advantage of $7.50 wheat (April/May 1996) and sold a
> percentage of their crop. I then ask if anyone sold wheat over
> $6.00 (a lesser amount, but a price that brings enormous
> profits). Guess how many of these farmers were bright enough to
> sell above $6.00 .....absolutely zero. Maybe, the time window
> was too small...after all, they only had six weeks to lock in
> those prices. What does that tell you?
>
> Monday morning, at 5:45 am, I'll start to get calls from my
> producers. Every one of them thinks that the wheat market is
> going up. I'll hear about the floods in China, "Uncle Billy"
> buying wheat for the poor and a bunch of other "horseshit"
> fundamentals. But, Harley, I've been short since Tuesday's
> opening and a most of these producers have reluctantly allowed
> me to put them in short positions because they also realize that
> when it comes to market direction: they don't have a clue. When
> you're always wrong, it's easy to blame Cargill, ADM, commodity
> brokers, floor traders, and anyone else so that you can shift
> the blame away from your own incompetence.
>
> I don't need to travel to Yankton...I live 7 miles from
> pavement, smack in the middle of a wheat producing area that's
> every Dakotaoans "wet dream". I do agree with your statement:
> "Anyway, enough said" and understand why you don't invest in
> futures.
>
> Steve Karnish
> CCT
> ----------
> > From: Harley Meyer <meyer@xxxxxxxxxxx>
> > To: metastock@xxxxxxxxxxxxx
> > Subject: Re: futures zero sum or not? Re: System development
> > Date: Sunday, August 23, 1998 8:29 PM
> >
> > Steve,
> > I don't invest in futures so I don't take it as a
> > tip. I look at what I saw as an American tragedy -
> > staring the family farmer. If you ever get to
> > Yankton, SD. Let me know you can spend some time
> > with him.
> >
> > I understand what you say as far as zero sum but
> > in some markets that isn't true. For example I
> > brought up to Darrell why don't you just deliver
> > your cattle on your future contracts. He laughed,
> > "ya right." The specs for live cattle delivery are
> > such that they can't be delivered. The delivery
> > weight is approximately 1150 lb.. Most cattle are
> > much heavier than that when they go to market. He
> > also said that the only place for delivery is
> > Chicago. So it becomes more expensive for
> > transportation.
> >
> > I might have the weights wrong but he did say if
> > he could of made it work he would of.
> >
> >
> > As far as a conspiracy it is a word. Now weather
> > the cost of doing business ends up with the same
> > results is a horse a piece and just another
> > word(s). Darrell has had to step out of the main
> > stream of raising livestock and do some things
> > that others don't or won't do to be able to make a
> > living.
> >
> > I don't thing Darrell calls it a conspiracy, he
> > just knows that Cargill and IBP are ruthless in
> > their business dealings. Now if you don't think
> > that these big grain companies don't control the
> > market that's ok with me. We all have our points
> > of view. But if you want to take advantage of the
> > trading opportunities then you need to listen to
> > the farmers who are trying to hedge their crops or
> > livestock.
> >
> > Anyway enough said.
> >
> > Harley
> >
> >
> >
> > Steve Karnish wrote:
> > >
> > > Harley,
> > >
> > > Beware Harley, I've received my most unreliable trading
> > > information at reunions. This blanket indictment of Cargill
> > > sounds like other common accusations: Soros controls the
> > > currencies, Buffet controls the silver market (or was that
> the
> > > Hunts?), the Mafia controls NFL Football. I have twenty
> wheat
> > > producers as clients and I hear conspiracy theories on a
> daily
> > > basis. If the "funds" are selling 2,000 contracts of on
> > > Monday... true, it will be hard for wheat to advance in
> price
> > > (but does mean that the funds control the markets?).
> > >
> > > This really hasn't a single thing to do with "zero sum".
> "Zero
> > > sum" is the term applied to the accounting of the futures
> > > market. Harley makes a dollar, Steve (or someone) loses a
> > > dollar. This is a huge difference when compared to stocks
> and is
> > > the reason that futures are a tougher game to extract
> profits
> > > from.
> > > Why didn't your friend hedge his crop at that wildly
> profitable
> > > level ($9.00)? Cargill doesn't control the market...fear
> and
> > > greed controls the markets.
> > >
> > > Steve Karnish
> > > CCT
> > >
> > >
> > > ----------
> > > > From: Harley Meyer <meyer@xxxxxxxxxxx>
> > > > To: metastock@xxxxxxxxxxxxx
> > > > Subject: futures zero sum or not? Re: System development
> > > > Date: Sunday, August 23, 1998 2:57 PM
> > > >
> > > > I went to visit a friend at our 20th class
> > > > reunion. He used to be a big farmer. 1000 head of
> > > > cattle and 300 hog fairowing (sp) operation. He is
> > > > small now. He said that Cargill and IBP pretty
> > > > much control the futures market. They control by
> > > > controlling supply of the commodity and by taking
> > > > positions in the market. He gave me several
> > > > examples. Here is one of them.
> > > >
> > > > Soybeans were around $9 and were about to breakout
> > > > to the upside. The farmers were holding back
> > > > taking their grain to the elevators. The farmers
> > > > where waiting for the breakout. After the breakout
> > > > the plan was to lock in their prices with a hedge
> > > > in the market and then take the grain to the
> > > > elevators. Well Cargill floated a rumor that they
> > > > bought 300 million bushels of soybeans from
> > > > Brazil. The soybean market collapsed and the
> > > > farmers had to take their soybeans to the
> > > > elevators taking a lower price.
> > > >
> > > > He is pretty frustrated over the whole situation.
> > > > The way he explained it to me. It is about the
> > > > same way that the share croppers were treated
> > > > years ago.
> > > >
> > > > A bit off topic but wanted to point out that the
> > > > futures has some bias when you think of a zero sum
> > > > game.
> > > >
> > > > Harley
> > > >
> > > > Steve Karnish wrote:
> > > > >
> > > > > John,
> > > > >
> > > > > Good systems that track commodities should be able to
> cross
> > > over
> > > > > and do well in equities. The futures game is "zero sum"
> (if
> > > > > John Manasco "wins" a dollar...Steve Karnish "loses" a
> > > dollar).
> > > > > Most folks believe that this makes it a tougher game. I
> > > thought
> > > > > just for fun I'd post the exact same linear regression
> > > > > oscillator systematic approach that I posted for lumber,
> but
> > > > > this time for a stock (DELL, one of Jim's current
> > > favorites).
> > > > > The approach is the same for lumber or DELL...but, the
> > > variables
> > > > > change to adapt to the rhythm. The chart represents the
> > > first
> > > > > six months of the year.
> > > > >
> > > > > Steve Karnish
> > > > > CCT
> > > > > ----------
> > > > > > From: John Manasco <manasco@xxxxxxxxxxxx>
> > > > > > To: metastock@xxxxxxxxxxxxx
> > > > > > Subject: Re:System development
> > > > > > Date: Saturday, August 22, 1998 11:56 AM
> > > > > >
> > > > > > Steve Karnish
> > > > > >
> > > > > > Thanks for the reply. You're right about my exit
> strategy.
> > > > > This is
> > > > > > something I'm working on to improve. I'd like to come
> up
> > > with
> > > > > something
> > > > > > that takes the decision out of my greedy little hands.
> I'm
> > > at
> > > > > my worst
> > > > > > when I try to outguess myself.
> > > > > >
> > > > > > I've never traded commodities, never even new what
> they
> > > were
> > > > > until about
> > > > > > five years ago. Someday I'll venture into that arena
> but
> > > for
> > > > > now I'll
> > > > > > stick to equities and options.
> > > > > >
> > > > > > Your forcast oscillator system is concise and to the
> > > point. I
> > > > > like
> > > > > > systems that have a minimum of indicators much more
> than
> > > > > systems that
> > > > > > use a myriad of indicators overlapping each other. Do
> you
> > > also
> > > > > use other
> > > > > > money management rules in case your system fails?
> > > > > >
> > > > > > Do you find some systems work better on futures that
> > > equities?
> > > > > I'm
> > > > > > comming to believe that there is no one system that
> will
> > > work
> > > > > on
> > > > > > everything but I need to tailor my systems for
> different
> > > > > industry
> > > > > > groups and different individual equities. This is
> hard to
> > > > > accomplish
> > > > > > without curve fitting but I'm finding that stocks do
> have
> > > > > their
> > > > > > individual personalities and respond better to some
> > > indicators
> > > > > than
> > > > > > others.
> > > > > >
> > > > > > Do you use candlesticks exclusively? Could you say
> > > something
> > > > > about why
> > > > > > you like them?
> > > > > >
> > > > > > Anyone else want to jump in please do so. I'd like to
> hear
> > > > > from new
> > > > > > investors and users of Metastock. How are you going
> about
> > > > > deciding which
> > > > > > indicators to study? Are there any trends developing
> which
> > > may
> > > > > be
> > > > > > helpful to more seasoned investors who also need help?
> > > When I
> > > > > first
> > > > > > started using Metastock I looked at the usual RSI,
> MACD,
> > > > > Stochastics
> > > > > > etc. Then everyone started exploring statistical based
> > > system.
> > > > > What's
> > > > > > new now? Any using fibonacci studies? How about cycle
> > > analysis
> > > > > and fast
> > > > > > fourier transforms? A Gann discussion group just
> started.
> > > I
> > > > > hope they
> > > > > > report back to the list on regular occasions on their
> > > > > progress.
> > > > > >
> > > > > > Anyway it's a nice afternoon and I'm going outdoors to
> > > enjoy
> > > > > it.
> > > > > >
> > > > > > Good trading
> > > > > >
> > > > > > John Manasco
> > > > >
> > > > > --------------------------------------------------
> > > > >
> > > > > Name: DELL.gif
> > > > > DELL.gif Type: GIF Image (image/gif)
> > > > > Encoding: base64
> > > > > Description: Dell (GIF Image)
> > > > >
> > > > > Name: DELL98.gif
> > > > > DELL98.gif Type: GIF Image (image/gif)
> > > > > Encoding: base64
> > > > > Description: Dell98 (GIF Image)
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